The turmoil continued this week with the announcement that Yahoo Chairman Roy Bostock and three other directors from the company's board were out as well.

"The board has concluded that in order to accelerate the company's transformation, the combination of a new chief executive officer with an enhanced team of independent directors would provide Yahoo with the expertise and perspectives necessary to drive innovation and growth going forward," write Bostock in a letter to shareholders.

He then reported that Alfred Amoroso, former president and CEO of Rovi Corp., and Maynard Webb Jr., former CEO and current chairman of LiveOps Inc., were elected to Yahoo's board. The board is searching for new members to fill the other openings.

An Internet pioneer in search, Yahoo has slipped in recent years and became something of an also-ran to newer Internet companies like Google and Facebook. Now it's a company in the midst of major turmoil.

Hadley Reynolds, an analyst with IDC, said changing the directors on Yahoo's board is intended to appease Wall Street, which hasn't been strong on Yahoo.

"Ever since Jerry Yang and the Yahoo board spurned Microsoft's $45 billion [acquisition] bid in 2008, the investment community has been broadly skeptical about whether the Yahoo board was competent to run its business," Reynolds said. "With the firm's market capitalization less than $20 billion, Yahoo has multiple initiatives going on to try to realize value for their investors, even while their core business deteriorates."

Yahoo needs to focus on cleaning up its balance sheet and getting the company back on solid footing.

Rob Enderle, an analyst with the Enderle Group, noted that Thompson, the new CEO, was smart to try to break up the old board and assemble one that will support his plans for the company's future.

"Yahoo's board has had trouble selecting and supporting CEOs historically and often appeared dysfunctional," he said. "Unless corrected, no CEO could be successful there, so, rightly, fixing the board had to be a priority. If you are building a team, you are often better off starting as close to scratch as you can because you may not understand, as a new CEO, where the problem really was."

It's been rumored for months that Yahoo's leadership is considering the possibility of finding a buyer for the company.

Potential suitors have again included Microsoft. Google has also been mentioned as a possible buyer, along with Facebook, which could use the influx of cash from its IPO to fund a big purchase.

No offers have materialized publicly, but a company considering selling itself might want a board that has experience with buying and selling - not to mention a board that is inclined to sell, rather than rebuild.

A new board might be more open-minded to various options and could have a sense of urgency in ending Yahoo's corporate limbo.

"With revenue and profits steadily down over the past few years, it's also obvious that the existing management team hasn't figured out a way to make the company more relevant in the era of Google and Facebook," said Dan Olds, an analyst with The Gabriel Consulting Group. "Shareholders are restless and getting more restless, so it's time to get some new blood in there."

With a rebuilt board on tap, all the company's options may be on the table.

"This move opens up the possibilities of selling all or parts of the company," Olds said. "The former board considered these courses of action, but didn't actually do anything substantial along these lines. I'd assume that everything is on the table now that Yahoo has a new president and a rejiggered board of directors."

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin, on Google+ or subscribe to Sharon's RSS feed. Her e-mail address is sgaudin@computerworld.com.

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